In 1998 Nonprofits that expended $300,000 or more in a year in federal awards had to have a single or program-specific audit conducted for that year in accordance with the A133 (OMB Circular A133). As of 2003 the A133 states that the expanded limit is $500,000 (http://www.whitehouse.gov/omb/circulars_a133) . If an organization has expended more than $500,000 in federal awards in a fiscal year, the organization will be required to have an A133, single audit.

For you Health Care Centers/Clinics –There is a more important question and that is what is not considered federal awards expended? (See the partial list of federal items identified in this section, even if these items meet the $500,000 limit, the items listed in this section will not require an A133 audit)

Medicare- "Medicare payments to a non-Federal entity for providing patient care services to Medicare eligible individuals are not considered Federal awards expended."

Medicaid (maybe yes - maybe no) - "Medicaid payments to a sub recipient for providing patient care services to Medicaid eligible individuals are not considered Federal awards expended. Caveat: Unless a State requires the funds to be treated as Federal awards expended because reimbursement is on a cost reimbursement basis." Please check your states requirements.

What are your A133 audit responsibilities?

The responsibilities of the nonprofit are:

Identify all of you federal awards received (as well as pass-through dollars), expended and the specific federal programs

Through-out the year to maintain internal controls, ensure that the federal dollars are spent in compliance with laws, regulations and the provisions of the contracts and grant agreements

For all Federal awards, prepare the appropriate financial statements and schedule of expenditures

Ensure the annual A133 single audits are properly performed and submitted on the specified due date

Follow-up and take corrective action on all prior year audit findings

Prior to your fiscal year end, between the second (2nd) or third (3rd) quarter of your current fiscal year, begin a self assessment, a pre-audit of your internal controls and a review of the previous year’s audit findings. Your assessment objective is to check your fiscal controls and to see if you have put all the corrective actions in place to resolve all prior year audit findings.

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